The quality of recovery-oriented mental health services for people with schizophrenia has become an important research focus, as reflected in NIMH Strategic Objectives 3 (improve treatments to allow those with mental illness live full and productive lives) and 4 (improve understanding of means by which interventions are disseminated and implemented). The proposed project addresses both of these objectives. Assertive community treatment (ACT) is one of the few evidence-based practices (EBPs) for schizophrenia that is widely implemented in community mental health (MH) programs throughout the USA, but ACT has little impact on functioning. Cognitive behavioral therapy (CBT) and social skills training (SST) improve functioning in consumers with schizophrenia, but these EBPs are rarely available in the USA in ACT teams or other community MH programs. The field must close the gap between research and service delivery by adapting EBPs for schizophrenia for delivery in community settings. Because ACT is widely implemented, the ACT team provides a unique opportunity for broader implementation of recovery-oriented EBPs like CBT and SST. In addition, lower functioning consumers who are most in need of interventions to improve functioning are typically assigned to ACT teams. We developed an innovative psychosocial intervention called cognitive- behavioral social skills training (CBSST), which combines CBT and SST to target functioning in schizophrenia. We have adapted CBSST for implementation on ACT teams and in pilot work have demonstrated feasibility and adequate fidelity of CBSST when delivered by community ACT staff in the San Diego County Mental Health System. The proposed project is an effectiveness trial comparing two treatments for schizophrenia: ACT+CBSST and ACT, alone. We propose to randomly assign 176 participants with schizophrenia or schizoaffective disorder to one of the two treatments for 9 months, and follow them longitudinally for 9 months after treatment. The primary aim is to examine the incremental effectiveness of ACT+CBSST relative to ACT, alone, on psychosocial functioning. Enhancing ACT by adding CBSST is hypothesized to improve the impact of ACT on functional outcome. We will also examine potential mechanisms of change in functioning in CBSST, including improving social competence and reducing defeatist performance beliefs (e.g., Why bother trying, I always fail) that can interfere with performance of community functioning behaviors. Finally, mixed qualitative- quantitative methods will be used to identify barriers and facilitators of successful CBSST implementation. The study will determine whether enhancing ACT by adding CBT and SST interventions improves functioning in people with schizophrenia when delivered by real world community ACT therapists in complex community practice settings with real world consumers. If ACT+CBSST is found to increase productive community contributions in people with schizophrenia, this could have significant personal, societal, and economic impact.